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IRS Announces Increased 401(k) Contribution Limits for 2022

Megan Williams

11/16/2021

Good news for anyone looking to save more for retirement – the IRS announced recently that investors can put an extra $1,000 in their 401(k)s in 2022.

The contribution limit for workplace retirement accounts, including 401(k)s, 403(b)s, most 457 plans and Thrift Savings Plans, is being raised from $19,500 to $20,500.

Catch-up contributions for those accounts is not changing: Investors age 50 and older can contribute an additional $6,500, bringing the total they can put in these accounts to $27,000.

The amount workers can contribute to individual retirement accounts (IRAs) remains unchanged at $6,000. The catch-up contribution amount for those accounts will also stay at $1,000, meaning those 50 and over can invest up to $7,000 next year.
Additionally, the income ranges to be eligible to contribute to Roth IRAs increase next year. The new phase outs are: between $129,000 and $144,000 for singles and heads of households (up from $125,000 to $140,000), and $204,000 to $214,000 for married couples filing jointly (up from $198,000 to $208,000).

The amount individuals can contribute to a SIMPLE (savings incentive match plan for employees) retirement account will also increase, from $13,500 to $14,000.

For more information on cost-of-living adjustments to retirement accounts, see the IRS’s release.

IMPORTANT DISCLOSURES

The information included in this document is for general, informational purposes only. It does not contain any investment advice and does not address any individual facts and circumstances. As such, it cannot be relied on as providing any investment advice. If you would like investment advice regarding your specific facts and circumstances, please contact a qualified financial advisor.

Any investment involves some degree of risk, and different types of investments involve varying degrees of risk, including loss of principal. It should not be assumed that future performance of any specific investment, strategy or allocation (including those recommended by HBKS® Wealth Advisors) will be profitable or equal the corresponding indicated or intended results or performance level(s). Past performance of any security, indices, strategy or allocation may not be indicative of future results.

The historical and current information as to rules, laws, guidelines or benefits contained in this document is a summary of information obtained from or prepared by other sources. It has not been independently verified, but was obtained from sources believed to be reliable. HBKS® Wealth Advisors does not guarantee the accuracy of this information and does not assume liability for any errors in information obtained from or prepared by these other sources.

HBKS® Wealth Advisors is not a legal or accounting firm, and does not render legal, accounting or tax advice. You should contact an attorney or CPA if you wish to receive legal, accounting or tax advice.


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